Letter: Real tax reform will fix wealth gap

Letter: Thorough tax reform will fix wealth gap

President Obama says the middle class and the hardworking single moms deserve a better future. His solution: Raise the minimum wage and raise the income tax on those earning over $250,000. This, however, will not erase the gross disparity.

To correct the imbalance and create prosperity, the country needs real reform on income, Federal Insurance Contributions Actand Medicare taxes. All income should be subject to a much lower FICA and Medicare tax. And to make the tax more progressive, a low flat tax would be added over an adequate personal exemption. One should not have to pay more than 30 percent of income in taxes.

By eliminating the many deductions and credits, the low tax rate on income will generate adequate income for essential government services and provide needed support for education. Low-income earners will have more take-home pay, and employers will have less incentive to pay cash. More transparency will result.

Employers who report paying their employees even for domestic help should he able to deduct the wages paid from their income subject to taxes. This would encourage more employment and higher wages. To merely raise the minimum wage and raise income tax rates on the rich will only make it harder for the unemployed to gain full employment, and it will encourage the rich to evade taxes by lobbying for tax loopholes.

It is the same with estate taxes. The rates are not to exceed 30 percent, but the exemption is not to exceed a few hundred thousand dollars. That rate will bring in a lot of revenue, and the wealthy will still have 70 percent to spend as they see fit. We can be confident much of that spending will be done responsibly and given to charity.

Read or Share this story: http://www.sctimes.com/story/opinion/2014/07/15/letter-real-tax-reform-will-fix-wealth-gap/12647935/